Streetlights are a ubiquitous presence in our modern infrastructure.  They deliver security and safety benefits but are expensive to operate in terms of consumed electricity and fixture maintenance. Light-emitting diode (LED) fixtures that replace the old sodium vapor lights can reduce operating costs and CO2 emissions, improve lighting for traffic and personal safety, and produce less “light pollution” spilling up into the night sky.

Pacific Gas and Electric (PG&E) is representative of US investor-owned utilities (IOUs).  It owns over 235,000 sodium vapor streetlights, and provides electricity for another 515,000 owned by cities, towns, and private companies or citizens.  That’s a significant amount of electricity consumed on the grid during off-peak times.  According to a 2006 study, replacement of all of the PG&E-owned streetlights would produce annual savings of $16M and be equivalent to deleting 6,000 cars from California roads in terms of CO2 emissions.  For cash-strapped municipalities, the numbers look even better – $37M in annual savings, and 82,000 tons of CO2 (equivalent to 14,000 cars) eliminated from the atmosphere. In northern California, more than 75 cities and counties have worked with PG&E to replace sodium vapor lights with LED versions, saving more than $1.1M per year in electricity costs.    For instance, the city of Oakland recently replaced 241 lights with LEDs – and expects to save $20,000 annually in electricity costs.   For the residents in the areas with upgraded lighting, they see an improvement in quality of life through increased safety and security.

But most replacement projects have opted for the LED fixtures and do not include the communications capabilities that the smartest streetlights contain. The low adoption rates are a shame, because smart streetlights could create interesting M2M (machine to machine) communications networks for more smart city services, especially those focused on transportation. Smart parking applications that share the communications capabilities enabled by smart streetlights could alert parking enforcement to inoperable meters and expired meters – just like the best smart meters for electricity do today.  What’s stopping investments in smart streetlights to build these communications foundations?  A lack of applications and a lack of the right financing programs.

We are just now seeing the first entrants in smart parking, car and bike sharing, and other innovations that could leverage communications networks and data with smart streetlights.  This past week, Cisco and Streetline announced an application that embeds sensors into street pavements. The mobile app will identify where available parking is and thus reduce traffic congestion and driver stress incurred in the hunt for parking spaces, and reduce CO2 emissions as well.

But smart streetlights cost about $100 more than LED streetlights without communications capabilities.  Cities have difficulties coming up with the cash to invest in these projects on their own.  Most loan programs for street light replacements mandate specific payback periods of 10 – 13 years.  In addition, the payback is calculated only on simple first year energy savings (the first year energy savings divided by the net project cost). When the cost/benefit analysis is made under these constraints, it doesn’t always pencil out to go with smart streetlights.

But there’s room for hope in California.  The recent carbon offsets auction put a price on carbon emissions for the first time.  California-based investor-owned utilities (IOUs) like PG&E buy offsets, and over time, the price of the offsets will rise.  The next financial analysis of streetlights should be made with projected carbon costs factored into payback periods.  And ideally, the financial aid programs that the state IOUs or the California Energy Commission offer to help cities convert streetlights should take a longer view of infrastructure investment.  After all, that’s what we’ve done with the Smart Grid.